Online Broker vs Financial Advisor Differences and Similarities

Online brokers explained

Many of you may have heard of an online broker or already want to know how to choose an online broker. The idea of an online broker is to provide trading services to individual traders. In this day and age, there are a wide number of easily-accessible broker platforms. These platforms can be accessed via a web platform, by utilising a personalized trading platform such as an MT5 trading platform, or via a trading app. On these platforms it is possible to open and close positions on a number of different instruments.

A broker platform provides you with a range of features and tools which allow you to analyse different exchanges and markets. All of which empowers you to control your trades to a much wider degree.

At CAPEX, we act as an online broker for all your trading needs. You’ll find a range of compelling resources and a dynamic trading platform that allows you to trade instruments on a daily basis.

Financial advisors explained

When it comes to financial advisors, you’ll notice that their services may well extend further than that of an online broker. Over and above facilitating day-to-day trading, advisors are expected to provide their own insights. This culminates in trading approaches or financial plans that are related to individual clients.

These plans extend further than just trading strategies and include how a client should handle his/her savings and overall financial budgets. It may even include varying tax strategies depending on the client in question. Thus, a financial advisor has an overarching obligation or opportunity to provide clients with financial advice that stems beyond investments.

At CAPEX, we have included a range of resources that have been crafted by financial analysts. However, this pertains to online trading rather than insights into personal financial management.

You’ll come to find that there may be slight similarities between an online broker vs financial advisor. However, bear in mind that there are also major differences when considering an online broker vs financial advisor.

Ultimately, the key differences between the two is what makes for interesting reading. The similarities between these two entities comes down to the fact that they operate within the financial services industry. As such, both entities exist in order to provide some sort of financial service – be it online trading or long-term financial advice. Thus, it’s important that both are licensed within their respective statutes to provide the underlying service at hand.

Both entities must cater to client needs and wishes

One of the major similarities between an online broker vs financial advisor is that both parties must adhere to the client’s wishes, which is one of our main values at CAPEX. It is not allowed for either one to provide any type of advice that is in clear conflict with what the client wants. Thus, it’s important to facilitate a seamless exchange with the best interests of the client at heart.

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The great thing about CFD trading online is that you can do it anywhere there is a secure internet connection. Inevitably, this means that mobile trading has proven particularly popular as traders can conveniently open and close positions from their mobile or tablet as and when it suits them.

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Differences in fees

When it comes to fee structures, you’ll find that there is a difference between an online broker vs financial advisor. When you use an online broker, you’ll pay a commission for opening or closing trades via the respective platform. This is the main fee to take into account. Yes, you may come across account management fees and such. Online brokers will charge a commission rate for facilitating the underlying trade.

A financial advisor will provide financial advice using a fee-based service. You are required to pay a financial advisor for the service of providing you with insights into how you should manage your money and/or invest it.

Contrast in regulatory oversight

An online broker should be regulated by a financial authority. You’ll find that we, at CAPEX, are regulated by the Cyprus Securities and Exchange Commission (amongst others). However, the overall regulatory oversight is not as over-burdening. Financial advisors are subject to a higher standard of regulation for the most part. Thus, they need to obtain a more in-depth legal financial license in order to provide financial advice to clients.

Scope of services

The scope of services also differs by and large. An online broker will enable you to access exchanges whereby you can trade instruments. Thus, an online broker facilitates the activity of opening and closing trades online. A financial advisor has a wider scope in terms of financial oversight. An advisor can provide services that pertain to more than just online trading to include overall personal wealth accumulation and management.

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